in Houston, Texas
Texas couple fit to be tied in red tape, stimulus weatherization cash more trouble than it was worth
Tuesday, Dec 11, 2012, 09:49AM CST
By Mark Lisheron
light bulb

Viewed in one very particular way, carefully following the bureaucratic contours of a $327 million stimulus energy efficiency program, the weatherization of Brandi and Byron Hockaday’s south Austin home is a success story.

Rules and guidelines were followed. Contractors and inspectors returned again and again to check the work. And when things weren’t right Austin Energy made them right at its own expense. And none of it, or almost none of it, cost the Hockadays a dime.

And yet, after more than two years and well over $14,000 spent, no one involved, least of all the Hockadays, believes they should have gotten involved with the federal weatherization assistance program in the first place.

On Oct. 31, after the latest of dozens of complaints, Austin Energy customer service representative Ann Salerno put an official end to its relationship with the Hockadays.

“For many months while assisting you, Austin Energy has exceeded its role as the involved electric utility,” Salerno said in a letter, one of a fistful Brandi holds in her hand on the sofa in their living room. “Austin Energy staff has gone above and beyond its obligations, and, at this point, there is nothing else Austin Energy can do to assist.”

But what about the gas line left exposed and running right alongside the air conditioning line in the bedroom wall? The positive test for mold? And the incessant cycling of an air conditioning system that is supposed to be the best in the industry?

All of the contractor errors, the unexpected visits to fix things that never got fixed. The arguing that one time nearly led to a fistfight. The derision and condescension from at least one of the Austin Energy officials.

“They damaged our house, they put our family in danger and they’ve repeatedly said we need to be done with this,” Byron says, unable to stay seated next to Brandi. “That’s what’s flooring us here. We’re tired of this shit.”

Spend five minutes with the Hockadays, and you are convinced tired isn’t at all the right word. They have painstakingly filed every document - paper and electronic - generated by their case. They recorded phone calls with workers, contracting supervisors and Austin Energy program leaders. They’re already tag-teaming their latest contractor.

The Hockadays aren’t tired by a long shot.

Pulling up to the Hockadays’ home in a neat, middle-class neighborhood, it is difficult to grasp how, indeed, they ever got involved in the program.

There is an older model, silver Jaguar in the Hockadays’ driveway of a nicely maintained 1,400-square-foot home.

Brandi and Byron HockadayBrandi and Byron Hockaday

The Hockadays built this house themselves in 1999. Both of them had good-paying jobs with a commercial printing company until day care costs for their two children made it more cost effective for one of them to stay home.

“We flipped a coin, and I became Mr. Mom,” Byron says. “It worked out because I wanted to get my own mobile IT business started.”

It worked out until June of 2010 when Brandi was laid off after 13 years with the company. In an economy that a congressional majority thought only a nearly $1 trillion stimulus could help, the Hockadays’ combined work experience came from an industry in decline.

Brandi started investigating and found that the family now qualified for food stamps. They enrolled the children in Medicaid for their health care. And when she went to the Austin Energy website she spotted a house ad for a “Free Energy Program.”

She filled out a two-page application sometime in late July.

The program the ad referred to was part of the Weatherization Assistance Program, the U.S. Department of Energy's $5 billion contribution to the $862 billion American Recovery and Reinvestment Act of 2009. The goal of the program was to help low-income Americans save money on their monthly bills by making their homes more energy efficient at no cost to them.

Joseph Guerrero, now the weatherization program coordinator for Austin Energy, says his company dispatched the inspector based, according to the program’s guidelines, on little more than the Hockadays’ current combined income.

An interview with the Hockadays, a visit to the home, past earnings, the value of the home, even the Jaguar in the driveway was not part of the calculation, he says.

“We had no authority to question any of it. It’s not arbitrary,” Guerrero says. “Had we denied it for any of those reasons, you can bet TDHCA would have been notified.”

On August 4 an inspector came to the Hockaday home and did a series of energy tests.

“On his way out the door, he told us it was one of the nicest homes he had been in since he started doing the inspections,” Brandi says. “He said, if anything, we’d probably be eligible for low-energy light bulbs.”

Unknown to the Hockadays at the time, Austin Energy was under threat of having its $5.9 million stimulus grant yanked by the state Department of Housing and Community Affairs. Texas Watchdog reported Austin Energy had managed to weatherize just 56 homes in the 18 months since the stimulus bill passed. Only four of the 44 agencies in the weatherization program had done fewer homes.

In the first year of the stimulus contractors statewide had spent $3.7 million, mostly on administrative costs, and had weatherized a total of 47 houses. Program directors from all over the state complained they were under tremendous pressure by Housing and Community Affairs to spend their stimulus grants.

"Is time running out for this program? Absolutely," state program director Michael Gerber said of Austin Energy at the time. "We will de-obligate funds before we let one penny of this funding go unspent."

Two months after the initial inspection, Robert Meredith, the owner of a second contractor, Go Green Squads, came to the Hockadays’ door with good news. The initial tests showed they qualified for a new air conditioning system.

The air conditioning system they had was working fine, Byron says. The inside unit had been replaced in 2008, and the outer unit had been repaired in the past couple of years, he said.

Meredith, Byron says, pressed them to decide. A new energy-efficient system would help them realize hundreds of dollars in savings.

“He said we were about to lose this if we didn’t decide and that we had to get this done,” Byron says. “My initial reaction,” Brandi says, finishing his thought, “was ‘Wow. Awesome.’ Byron’s reaction was, don’t muck around with it. I love my AC. Byron gave in.”

A ‘deceptively complex’ government program

The decision to install a new air conditioning system in the Hockaday home was based on calculations punched into thresholds set by the federal government, nothing more, Guerrero says.

At no time did Austin Energy officials issue a directive to speed up or increase spending on the units they were weatherizing, he says.

Susan Meredith, Meredith’s wife and the company’s co-owner, says Austin Energy gave the company 10 days from the time a work order was generated to start work. Never did Austin Energy call for spending over and above that recommended on the work orders, she says.

On Oct. 8, 2010, Go Green Squads installed an new air conditioning system and thermostats. The $2,433.27 in expenses was paid for by the federal program, which allowed for a maximum of $6,500 to be spent on each housing unit.

“And for nine months we thought it was the best program in the world,” Brandi says. “We felt like we won the lottery.”

Until the day Byron came home and felt warm. The Hockadays regularly set their thermostat at 75 degrees. The temperature read 77 degrees, and to get there the air conditioning unit was running for hours at a time without cycling off.

Thus began a series of calls and responses from contract workers. They did temperature readings. Had Byron seal and insulate his attic door. The ductwork was checked. The plenum, an air circulation chamber in the attic, was rebuilt. Several times.

During these months of trial and error, the Hockadays reported condensation on their vents and a musty smell in the house.

Around one of the openings in the attic, Byron found black soot he thought was mold. The contractors insisted it be referred to as a mold-like substance. In January of this year the Hockadays had tests done that determined the mold-like substance was mold.

At the same time, the Hockadays’ monthly utility bills were now exceeding the bills for the same months with their old air conditioning system.

In the absence of solutions, Byron offered troubleshooting suggestions like checking the coil that were routinely ignored, he says. It seemed as though the workmen were going through the same motions again and again. During one visit insults were exchanged and challenges made before Byron and a crew member could be calmed down.

“They were coming here all the time, all different times of day. They’d never call, they’d just show up. Then they never did anything. It was like watching monkeys hump a football,” Byron says.

From then on, Brandi systematically worked her way up alerting the chain of command at Austin Energy to their problems.

On Dec. 20, 2011, Austin Energy ordered another full inspection of the home and followed it with a systematic retracing of all the steps that had so far bedeviled the other contractors.

But not until March 20, 2012, did the company reach the conclusion that the air conditioning system installed by Go Green Squads needed to be replaced. The coil Byron had been pointing to was designed for a four-ton air conditioning system. It had been trying to cool the house in a three-ton system.

“There definitely was a problem with the system,” Susan Meredith says. “And we were very committed to fixing their system. But there are so many different factors involved. That is why I say this is a deceptively complex program.”

Austin Energy decided that it wouldn’t be Go Green Systems but McCullough Heating and Air Conditioning that would install not only a new air conditioning system but a new furnace.

The cost, $8,604.81, was more than three times the first system. The company did some additional calculating and cut two checks to the Hockadays totalling $453.58, an estimate of the cost of the additional energy consumed by the old system.

In all, Austin Energy turned over just $3,000 in bills for the Hockaday work to Housing and Community Affairs for federal reimbursement. Austin Energy assumed the rest.

Guerrero said he didn’t want the blot on a program he is proud of.

“I thought it was in the interest of everyone involved that we change out the equipment for a new system,” Guerrero says. “Our goal was to satisfy a customer who had some extreme concerns. I think that by looking at the facts of the case alone, this was not a normal course of business for us.”

By the overall standard of Austin Energy work, the Hockadays weren’t normal business. Of the 1,886 units weatherized with stimulus funds, Austin Energy went over the $6,500 budget 13 times, a check of the records by Texas Watchdog showed.

Nine of the thirteen were total bills under $7,000, one of them over the limit by 83 cents.

Despite its slow start and by the decidedly low standard set by a program beset throughout with administrative incompetence, poor workmanship and allegations of fraud Austin Energy was a solid performer.

(You can track the program’s performance and that of all the other local programs in the Weatherization Assistance Program in charts provided here.)

Once threatened with a loss of funding, Housing and Community Affairs eventually shifted more than $3 million more from laggard programs to Austin Energy. The program spent all but $1,100 of its $9.2 million, Guerrero says.

And while Texas Watchdog tracked a rather dismal record of workmanship problems statewide, Austin Energy performed better than most. (You can examine the results of eight spot inspections of contractor work done by the Department of Housing and Community Affairs did over two years here.)

“One house out of all those we worked on is a pretty good record, I think,” Guerrero says.

Utility: Responsibilities fulfilled

But what of the record at that one house?

In the weeks that followed, the Hockadays discovered a water buildup in a garage ceiling that showered water and sopping drywall on computer hardware Byron had stored there. Negotiation with the contractor for reimbursement came to an impasse when the Hockadays wouldn’t surrender the hard drives for replacement.

McCullough tracked the moisture problem and in July rebuilt the plenum, return and filter system.

The installation of the air conditioning system, Byron says, has juxtaposed an air line unsafely with a gas line running to the new furnace. The Hockadays have demanded an inspection. McCullough insists they already deemed the parallel lines safe.

The Hockaday home gets cool, with digital thermostats festooning the house to prove it. But Byron swears this new, top-of-the-line energy efficient air conditioner still cycles for hours.

It is December, and in the cool weather the Hockadays can’t be sure, but all of that cycling, Byron says, isn’t going to save them any money come summer.

And if something more should go wrong, Austin Energy has said it won’t be coming around any more.

In the hundreds of units done by Go Green Squads as one of the six contractors used by Austin Energy, Susan Meredith says she never experienced anything like the Hockadays.

Understanding the cold calculating of eligibility and rehabilitation, Meredith still wonders if this program ought to have been serving a family like the Hockadays. She thinks the couple knew what they were doing, that they “gamed the system.”

Austin Energy and its contractors, she says, were caught in the classic quandary: Was there too much government or not enough government?

“In hindsight we shouldn’t have bent over backwards,” she says. “We spent so many hundreds of dollars we didn’t bill for trying to make them happy. All we did was create a bigger problem.”

The weatherization assistance program, at least at the start, would not allow anyone to walk away from the Hockadays, Guerrero says. Austin Energy, he says, has more than fulfilled its responsibilities.

The Hockadays do not believe that. It takes them nearly three hours on the sofa to tell their story, and only because they are forced to leave out all sorts of details. The Hockadays are consumed by the details.

Brandi is working again, at home and as a virtual assistant at a fraction of her old salary, she says. Byron is still working to make a go of his business. Their combined income, Brandi says, would easily make them eligible for the Weatherization Assistance Program if it were available today.

Knowing what they know now, the Hockadays say they would have never applied. But having done it, having gone through it, they aren’t about to give up.

“From the time we applied, all we expected them to do is do their job right,” Byron says. “That’s all we asked all along. I don’t think that’s too much to expect. Do you?”

Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

Keep up with all the latest news from Texas Watchdog. Fan our page on Facebook, follow us on Twitter and Scribd, and fan us on YouTube. Join our network on, and put our RSS feeds in your newsreader. We're also on MySpace, Digg, FriendFeed, and tumblr.

Photo of light bulb by flickr user ikewinski, used via a Creative Commons license. Photo and video of the Hockadays by Mark Lisheron.

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Texas state payroll shrinks, though not in higher ed or at the DMV
Thursday, Nov 01, 2012, 12:10PM CST
By Mark Lisheron

Social services, criminal justice and education were largely responsible for reducing the state payroll by ½ a percent in the past fiscal quarter in Texas.

The reduction of 1,620 full-time positions, bringing the total down from 297,502.9 positions, was nearly offset by the addition of 1,587.6 positions in the state’s institutions of higher education, according to a new report by the state Auditor comparing employment in the previous quarter to the same period in 2011. (See a chart tracking the change here.)

While total higher education staffing increased by 1.1 percent to 148,557.9 full-time equivalencies, the number of administrators jumped by 2.4 percent over the same period a year ago to 3,023.6 positions.

The Department of Aging and Disability Services reduced its staff over a year to 16,878.8 positions. The reduction of 721.2 positions was the biggest single loss for a state agency, according to the study.

The Texas Department of Criminal Justice and Juvenile Justice Department dropped a combined 1,101.7 jobs from the end of August 2011.

The Texas Education Agency, which began laying off employees during a tough legislative session on public education in 2011, reduced staff by 226.2 to 701.6 positions, a 24.4 percent drop, the highest percentage decrease among major departmental employers.

The Texas House under Speaker Joe Straus and the Senate, headed by Lt. David Dewhurst, both conservative Republicans who have called for smaller state government, made double-digit percentage reductions, shedding more than 100 employee positions each.

It is important to note that in June through August of 2011 the Legislature was just completing a session and in the same quarter this year the Legislature had been adjourned for more than a year.

The Department of Public Safety, in the midst of a $63 million spending spree to open driver’s license megacenters across the state, brought its staffing to 8,692.8 positions by adding 347 jobs, more than any state agency.

Texas state employees

The Department of Motor Vehicles grew its staff by 151.3 positions to 730.2 positions or 26.1 percent, the highest percentage increase of any major state agency.

Governor Rick Perry, another high-profile, small government conservative, added 3.9 positions in a year, bringing his staff to 264.1 positions.

Attorney General Greg Abbott, whose staff handled a Supreme Court challenge to Obamacare that was not upheld and a Supreme Court redistricting fight this year, increased his office’s staffing by .3 percent, 13.7 positions added to a staff of 4,057.2 positions.

The General Land Office, headed by conservative Land Commissioner Jerry Patterson, who is running for lieutenant governor in 2014, boosted his staff by 20.9 positions or 3.6 percent to 600.9 positions.

However, Patterson’s agency was called on in August of 2011 to take over nearly $3 billion in federal funding that had not yet been distributed in relief for the victims of Hurricane Ike in 2008.

The Department of Rural Affairs, one of the agencies criticized for its handling of the Hurricane Ike funding, was abolished by the Legislature, a reduction of all of its 70.6 positions, the Auditor’s report says.

The other agency with Ike responsibilities, the Department of Housing and Community Affairs, lost 52.2 or 14.4 percent of its staff during the same period. Michael Gerber, the executive director of the agency, resigned at the end of August of 2011.

Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

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Photo of Texas state Capitol dome by flickr user victorfe places, used via a Creative Commons license.

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Latest blunder by state housing agency: Texas discriminated by putting too much affordable housing in poor, minority areas, court finds
Wednesday, Mar 21, 2012, 10:55AM CST
By Mark Lisheron

Over the past three years, the Texas Department of Housing and Community Affairs has placed new emphasis on embarrassment in the phrase embarrassment of riches.

On Tuesday, a federal judge ruled the department’s interpretation of a crazy quilt of federal and state guidelines has led to systematic, but somehow not deliberate, discrimination in its distribution of tens of millions of dollars in federal tax credits to build affordable housing in Texas.

Sounds complicated? Maybe that’s why the department needed $1.6 million of our tax money for legal representation to help them keep everything straight, according to a story today by the San Antonio Express News.

It seems that Housing and Community Affairs, which is expected to dispense $55 million of these tax credits in 2012, keeps giving them to builders to put up affordable housing in poor and minority neighborhoods.

The goal of the program, if we’re following this correctly, is to build a certain percentage of this housing in more affluent, or in the government vernacular, “high opportunity,” areas.

The department is doing woefully little high opportunity building and has 60 days to deliver a plan to change that, U.S. District Court Judge Sidney Fitzwater ordered.

The original lawsuit filed in 2008 by Inclusive Communities Project, a Dallas non-profit also supported by our federal tax dollars, claimed the department had been picking projects with race bias. Fitzwater’s ruling placed the burden on something at least as pernicious, hopelessly clotted bureaucracy.

One could very nearly empathize, but the Department of Housing and Community Affairs hasn’t had much luck doing one of its core jobs of handling our federal tax dollars.

The department parted company with its executive director, Michael Gerber, last August over its inability to disburse nearly $3 billion in federal relief funds to Texans who lost property to Hurricane Ike in 2008.

Gerber’s oversight of $327 million in federal stimulus funds to weatherize low-income homes and apartments, the subject of dozens of Texas Watchdog stories, didn’t help in his performance review.

The Weatherization Assistance Program was beset by allegations of fraud, bad workmanship, and, like the hurricane funding, an inability to push the windfall out its doors.

After getting its deadline extended by six months to the end of last August, the department’s weatherization program still had not spent almost $78 million of the $327 million Congress granted them in February of 2009, according to the department’s weekly reports.

While federal officials had at the time the stimulus bill passed threatened to take back funds not spent by the deadline, Housing and Community Affairs dribbles on with $13.7 million not yet stimulating anything.

(Please see the weekly report from Sept. 26, 2011, for the end of August totals and the latest report from March 5, 2012 by scrolling here.)

It is unclear from the most transparent and accountable program in our lifetimes whatever happened to all the talk at the outset of the stimulus of “use-it-or-lose-it.”  Navigate the federal government’s $27.7 million stimulus website and try figuring out what’s been used and what’s been lost.

Don’t feel bad. We’ve been trying for years.

Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

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Photo 'Building Houses' by flickr user Images_of_Money, used via a Creative Commons license.

Texas state housing chief resigns; agency failed to use Hurricane Ike rebuilding funds, oversaw faulty stimulus program to fix up low-income homes
Thursday, Aug 18, 2011, 08:18AM CST
By Mark Lisheron
Galveston following Hurricane Ike

Gov. Rick Perry has accepted the resignation of the head of the state’s housing agency, which has failed to handle billions of federal dollars to rebuild homes in the wake of Hurricane Ike and oversees a federal stimulus program plagued by questions of fraud and mismanagement.

Michael Gerber, executive director of the Texas Department of Housing and Community Affairs, tendered his resignation, effective Aug. 31, as Perry yanked nearly $3 billion that has yet to be used to rebuild thousands of homes, roads, public utilities and buildings damaged or destroyed in 2008 by Hurricane Ike.

The program, administered together with the Texas Department of Rural Affairs, has been shifted to the state’s General Land Office. Timothy Irvine has been named interim chief at Housing and Community Affairs.

Crushed beneath billions of dollars in federal disaster and stimulus weatherization funds, the housing agency is still scrambling to spend more than $92 million in what has been a troubled stimulus Weatherization Assistance Program, reported on extensively by Texas Watchdog.

The agency has taken more than two years to spend the rest of the $327 million allotted to it. It has stripped funding from a handful of its 44 original contracting agencies and has investigated dozens of instances of alleged fraud and bad workmanship. Out from under the burden of the Hurricane Ike disaster program, Irvine is confident the agency will not have to return any of its weatherization funding to the U.S. Department of Energy.
Michael GerberGERBER

Gerber is on paid vacation until his departure date. A call by Texas Watchdog to his cell phone number was not returned as of Thursday morning.

In addition to Gerber’s departure, Perry asked J. Paul Oxer, a member he appointed in March, to take over as chairman of the Housing and Community Affairs board. The Legislature abolished the Department of Rural Affairs, a move recommended in 2005 by the Sunset Advisory Commission, turning over its duties to the Department of Agriculture.

The Governor originally designated two agencies to handle the Ike money because the Department of Rural Affairs administered the state’s Community Development Block Grant program through which federal disaster funds flow. Rural Affairs was to handle the infrastructure, and TDHCA was to handle the housing recovery.

“The problem had to do with putting the Ike recovery funding in the hands of two agencies, each with their own bureaucracies,” Kathy Walt, a spokeswoman for Perry, said Wednesday. “The General Land Office has played a role in disaster recovery in the past, and the governor has confidence in Jerry Patterson (Texas Land Commissioner) in getting this taken care of.”

Gary Hagood, chief financial officer for the Land Office, pledged Wednesday to have all of the HUD money spent no later than December of 2015. While insisting on not dwelling on past performance, Hagood expressed impatience that after nearly three years two agencies managed to spend just $200 million while Hurricane Ike victims lived in trailer homes.

“I don’t care about the history, I’m interested in streamlining, and if there’s stuff in the way I’m going to move it out of there,” he said Wednesday. “You had a bunch of people working with contracts that had no milestones. Now, we’re going to say if you don’t hit this milestone, we’re going to terminate your contract.”

Adding the Weatherization Assistance Program to an agency unprepared to get into the disaster recovery business was an unsustainable blow, Irvine said. With its welter of state and federal requirements and the cross-purpose goals of spending hundreds of millions of dollars quickly, efficiently and well, “We very quickly found out that drinking from a fire hose wasn’t that easy,” Irvine said.

Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

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Photo of Galveston following Hurricane Ike by flickr user simminch, used via a Creative Commons license.
As federal stimulus turns 2, Texas’ stimulus jobs -- largely government jobs -- wind down
Thursday, Feb 17, 2011, 10:05AM CST
By Mark Lisheron
federal stimulus sign

The 15 men weatherizing homes for the Nueces County Community Action Agency have done their work well. So well that they will soon be without jobs.

The crews, employed by Corpus Bayside Investments in Corpus Christi, like thousands of people in Texas and across the country, have jobs that would not exist without the more than $800 billion American Recovery and Reinvestment Act.

Today, on the second anniversary of President Barack Obama’s signing of the stimulus act into law, those thousands are coming to see that without the federal government or some government continuing to pay them that their jobs will, by legal definition, go away in the coming months.

“Once the two years is up, bottom line when this job is done those crews are going to have to be laid off,” Tom Criser, executive vice president for Corpus Bayside, says. Criser hired the men specifically to meet the needs of the stimulus contract he bid on for Nueces County. “We knew from the beginning it was going to be temporary.”

At the time of its passage, the president, basking in the historic importance of the bill, promised the huge infusion of taxpayer-backed funding would be a quick tonic for the economy and would put people back to work. Economists and politicians are likely to argue forever about whether the two full years it has taken for the economy to stir fits the definition of a stimulus and whether redistributing taxpayer money by presidential fiat helped or hurt that effort.

The number of jobs created by the stimulus has also been disputed from the start. The Congressional Budget Office has stubbornly clung to an estimate of 3.3 million jobs created., the website created by the Obama Administration to track the stimulus, reports a fraction of that amount -- 585,654 jobs reported by the agencies who received stimulus funding through this past December.

In November, Texas Watchdog reported that stimulus jobs in Texas cost about $130,000 per job --- and a handful of them cost more than $1 million apiece. The figures were based on comptroller’s office reports on the 38,160 jobs created in Texas with $5 billion in stimulus funds.

Whatever the number, not until this last month has the national unemployment rate dropped to 9 percent, almost a full percentage point higher than the unemployment rate two years ago when the Recovery Act bill was signed.

The nation, however, is just now getting a glimmer of what is going to happen to those stimulus jobs when the money runs out. Of the $275 billion of the stimulus not paid out in tax benefits or entitlements, the states have spent $179.8 billion or about 65.4 percent of the total, according to the current figures. The state of Texas has spent $19.1 billion or more than 78.1 percent of the $25.1 billion in stimulus funds it was awarded, according to the most recent figures kept by the state Comptroller.

Very quietly and months before the funding will run out, the state House Committee on Federal Economic Stabilization Funding, formed in February of 2009 to oversee the stimulus in Texas, has been dissolved, its chairman, Rep. Jim Dunnam, D-Waco, beaten in a November election.

In December, the committee left behind an 83-page interim report to the Legislature that, although laden with testimony from people involved, arrived at very few substantive conclusions about the impact of the Recovery Act on Texas. In its final paragraph, the report echoes what many are now saying about it.
The Recovery Act was designed to be temporary. In the quarters following its peak impact, the amount of stimulus outlays and tax reductions will decline and the impact on the level of GDP and employment will begin to lessen as it does so.
In a state where 7 out of 10 stimulus jobs were in public education, the cry has already begun going up in the state’s biggest school districts. On top of an overall dismal fiscal picture, the Houston Independent School District in late January notified at least 170 people with stimulus jobs their funding would be gone by June. But this is the same district that last fall was spending $18 million in stimulus cash on more than 200 employees it admitted it did not need.

In Austin, where district administrators are looking at cutting more than 1,000 positions, 120 of those are currently being paid with stimulus dollars, AISD spokesman Andy Welch says. Many of the jobs are in special education, remedial education and parental support, jobs that some prospective hires turned down knowing the funding was finite, Welch says.

“The truth of the matter is, school districts did what the state did with the stimulus, used it to prop up existing programs and balance budgets,” Welch said. “It allowed us to limp along for another two years. Well, we’ve limped along right to the cliff.”

Roger MeinersMEINERS
Roger Meiners, an economist at the University of Texas at Arlington, says he wonders why people are surprised to learn that temporary funding means temporary employment. Meiners, who has been sharply critical of the overall effectiveness of the stimulus, says most of the jobs were created in the public sector and will have to be sustained with tax money or disappear.

“They threw a bunch of federal money at a problem that they didn’t solve, and now the bill is coming due at the state level,” Meiners says.

Weatherization program a study in how stimulus played out

The Weatherization Assistance Program in Nueces County and elsewhere in Texas typifies the way stimulus has worked. From a pool of $5 billion, U.S. Department of Energy gave the state Department of Housing and Community Affairs nearly $327 million to distribute to local agencies to make low income homes more energy efficient.

The department, which had an annual budget of $13 million for its comparatively modest weatherization program, needed to hire dozens of state workers to handle the distribution of the money and the paperwork alone. The program got off to a a slow and troubled start in which it reduced its goal of weatherizing units from 56,000 to 38,000. Shoddy workmanship resulted in managerial shakeups and millions of stimulus dollars being stripped from local programs.

Weatherization has rebounded, with contractors statewide completing 26,743 units and the department spending $140.6 million or 43 percent of the $327 million total through the first week in February, according to department director Michael Gerber.

The Nueces County Community Action Agency is one of the stars of the weatherization effort. Housing and Community Affairs gave the agency $3.2 million. The agency has spent $2.7 million or more than 84 percent, higher than all but one of the largest contracts among the nearly four dozen agencies statewide doing the work. Their quality of work record has been very good.

Because Housing and Community Affairs faces the possibility of having to return millions of stimulus dollars if it can’t spend its sum by the August deadline, agencies like Nueces County might be able to pick up extra stimulus work, Alma Barrera, community services director, says.

If not, Nueces County will meet its goal of 443 units weatherized months ahead of schedule. The eight people Barrera hired, seven of them to do weatherization assessments, will be let go once the stimulus runs out.

“I wish we could get more funding. I’m proud of this team and the work they’ve done. They are revved up,” Barrera says. “But we knew what we were getting into. We looked at it as a once-in-a-lifetime opportunity, and we didn’t want to waste it.”

In spite of the fact that more than half of the weatherization money is not yet spent, employment of contract workers statewide during the quarter that ended in December was down to 860 from 940 the previous quarter.

“It was clear with the weatherization program that the money was going to come to an end,” Gerber says. “Our view on the job picture in that internally, we’d like to keep people in-house and find other opportunities. On the external front, when the stimulus funds are gone, they’re gone, and so are the jobs. Our hope is that in the end these folks can find other work.”

Meiners sees Gerber’s outlook - trying to find a way to keep workers on the public payroll while shedding the private-sector jobs - as a fatal flaw with the Recovery Act as a genuine jobs engine.

“You’re certainly not creating employment in areas that are self-sustaining. It seems to be a lot of bureaucratic foolishness to me,” Meiners says. “The federal government is very good at this, giving agencies starter money for this or that program and then leaving it to the states to maintain it when the money runs out.”

Long-term solutions sought

The state Department of Transportation would appear to have been impervious to these problems. Unlike Housing and Community Affairs it was large enough and bureaucratic enough to easily take on the $2.2 billion it received. Its mission of creating and maintaining infrastructure was at the core of President Obama’s mission for the Recovery Act.

Without it, as many of 15,000 Texans in the construction trades might have been out of work in the first six months of the stimulus, according to Tom Johnson, executive vice president for the Associated General Contractors of Texas.

“The stimulus was a lifeline that was extremely important to us,” Johnson says.

In just four years, however, the amount of work the department has under contract has dropped to about $9 billion from $16 billion. The state is facing a budget shortfall some say is more than $20 billion. And for the past three years, the department has been under considerable pressure to expand its vision beyond road building and repairing.

Around the country, construction industry leaders like Johnson are expecting the end of stimulus to deal contractors a significant blow. Johnson isn’t ready to predict layoffs, but he said without the added cushion of stimulus dollars, TxDOT is likely to focus its efforts on major projects, leaving smaller contractors with the leavings.

“Right now, all the balls are in the air, and they are going to be in the air for the next three or four months,” Johnson says. “What know what will happen after that.”

Contrary to the promises of the President, the American Recovery and Reinvestment Act was not a final answer to the problems he identified.

“The stimulus was a stopgap measure, not a long-term solution,” Johnson says. “And I don’t think there is anyone at the federal or the state level who has the appetite for a long-term solution.”
Contact Mark Lisheron at 512-299-2318 or

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Photo of a federal stimulus sign by flickr user Steve Rhodes, used via a Creative Commons license.
Austin Energy among poorest performers in Texas' stimulus program to fix up low-income homes
Wednesday, Sep 08, 2010, 04:56PM CST
By Mark Lisheron

The utility has been weatherizing homes for three decades and is called a model program. But Austin Energy has been fixing up homes at a snail's pace; officials say they're simply moving carefully.

Of all the local agencies set for a windfall from a $326 million federal stimulus program to weatherize homes in Texas, none seemed in a better position to use the money wisely and quickly than Austin Energy.

utility had run a program to make low-income homes more energy efficient for 30 years, a program considered a model in a city that has long prided itself on being a statewide leader and innovator in energy conservation. Officials for the state Department of Housing and Community Affairs in the spring of 2009 could only imagine what Austin Energy would do with an additional $5.9 million in federal stimulus money for the Weatherization Assistance Program.

Officials are still imagining.

Austin Energy is one of the poorest performing weatherization programs in Texas. There have been months of meetings to find ways to put more crews to work, officials say. Critics of the program with the Environmental Defense Fund office in Austin have volunteered a plan to find homeowners eligible for energy efficiency work.

Still, the program's methodical plodding has caused Housing and Community Affairs director Michael Gerber to threaten handing over a big chunk of Austin Energy's funding to some other agency prepared to spend it. 

"Is time running out for this program? Absolutely," Gerber said. "We will de-obligate funds before we let one penny of this funding go unspent."

After 18 monthsthe Austin Energy program which aims to help the poor by installing appliances, window screens, insulation and other energy-saving devices in their homes has so far weatherized just 56 homes. Only four of the 44 agencies in the state receiving federal weatherization money have done fewer homes through the end of August. By comparison, Corpus Christi, with a $3.2 million budget, has done 367 homes and Sheltering Arms Senior Services, a nonprofit in Houston, 2,190.

In a program that places a premium on pumping money back into the economy, Austin Energy has spent $243,755 of its $5.9 million, nearly $100,000 of it on administrative and program support costs. Only two agencies statewide have spent a smaller percentage. One of them, Travis County Health and Human Services, has spent less than $75,000 of its $4.6 million but has still manged to weatherize nearly twice as many homes as Austin Energy.

In its first monitoring report in mid-May, state housing inspectors reported nothing but a concern about a lack of work. Five homes had reportedly been weatherized, but contractors had so far turned in no paperwork to review. Inspectors reported expenditures at zero. As a result, Austin Energy has reported creating just 4.82 jobs through June, this number based not on actual people hired but on a formula averaging 40-hour work weeks, according to Housing and Community Affairs data.

The anemic numbers nettle Karl Rábago, an Austin Energy vice president who oversees the stimulus weatherization program, but for reasons that hint at why it has taken Austin Energy to get going. From the start, Austin Energy has approached weatherization as a social program, Ra'bago said. The goals are reducing the utility bills of customers and reducing the burden of power use on the utility grid.

From the start, the weatherization program sponsored by the American Recovery and Reinvestment Act was a spending program that was supposed to get money into the economy swiftly and put people to work. The program had the added benefit of helping low-income families live less expensively, Ra'bago said.

Karl RábagoRÁBAGO

Like all of the other local agencies Austin Energy suffered through months of delays trying to satisfy the requirements of the state and the Department of Energy, which was having its own problems ramping up to distribute $5 billion in weatherization money across the country. But when the money began to flow at the end of 2009 and Texas agencies began reporting their first work, Rábago said Austin Energy was at a particular disadvantage, having to get all of its approvals from a third entity, the city of Austin.

"We are the only utility doing weatherization in the state, and there is a reason why others are not doing it," Rábago said. "Utilities don't have the skill set for bureaucratic services delivery. If I were doing a political risk assessment on this weatherization, I'd be told, 'Don't do it. You'll regret it.'"

Because of what Gerber calls the culture of weatherization at Austin Energy, the utility has found it very difficult to go from spending $1,500 a housing unit under the old plan to having as much as $6,500 to spend on each unit. The federal government has very different expectations of future energy savings for the dollars spent on each house, Rábago said.

"We've suffered from trying to spend $6,500 a house. This is way beyond what has ever been done at Austin Energy," he said. "The system is set up for speed, volume and quick hits. Ours is set up to touch lives."

The very success of the utility's weatherization program in the past may have led to overconfidence at the start, Kate Robertson, an energy efficiency specialist with the Environmental Defense Fund's Texas regional office, said. Robertson, whose nonprofit work in Austin includes other projects with Austin Energy, said she and a team of unpaid community volunteers have developed a plan to go back and try to find low-income people missed by Austin Energy's first canvass.

"I was disheartened to hear how poorly they were doing," Robertson said. "Because they have done so much and their program is so respected this is an embarrassment to them."

Gerber said Austin Energy has been poorer than almost all of the other agencies at adapting to the realities of the state and federal regulations that came with the program. Administrators seem abnormally preoccupied with following the weatherizing rules to the letter and not making any mistakes on the paperwork required by both by Housing and Community Affairs and DOE.

"We've been concerned for a while now that they are not growing the program, balancing what they consider their risk with the scale they need to maintain and the dollars they need to spend," Gerber said.

Robertson said Austin Energy had developed over the many years of their own program software and training that had to be set aside and replaced with federal guidelines and training.
Past penetration into low-income areas of Austin made it harder to find homes that needed as much as the $6,500 federal limit on weatherization. Austin Energy's method of contact with those homeowners was to put fliers in the monthly paper bills its customers received, she said.

"It was pretty clear that when we looked at it, people had not gotten the message that this program was available to them," Robertson said. 

In spite of having received noncompliance letters from Gerber's department, threatening to take funds away if things don't shape up, Rábago is adamant that his crews won't do anything less than a complete job on each housing unit simply to get production numbers up -- but he has promised production will improve.

Austin Energy has agreed to have Robertson coordinate the training of about 20 students at Austin Community College and Huston Tillotson University to go door to door in likely neighborhoods to find eligible clients. Robertson said she believes Austin Energy can move forward without the state withdrawing any of its funding.

Oddly, for all their discouraging talk, both Gerber and Rábago insist that a rather large and slow moving ship can be turned in time to avoid the iceberg of transferring the money to other agencies in Texas.

"Right now I'm investing in how to get up and running and doing it right," Rábago said. "I don't believe the program is doomed to fail, and right now I'm not going to get into any rationalization for failure."

Contact Mark Lisheron at 512-299-2318 or

Photo of a compact flourescent light bulb by flickr user k-ideas, used via a Creative Commons license.

Read more about how the stimulus is playing out in Texas. Search STIMULUS at

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Residents thankful for federal stimulus assistance; Sheltering Arms boosts work quality in weatherization program
Wednesday, Sep 01, 2010, 03:46PM CST
By Mark Lisheron
electricity meters

Standing in Doris Solomons' cramped but cool living room as the sobs choked her gratitude, I couldn't help but think all of this should have happened months ago.

Here was a woman who had recently lost her son to skin cancer, who had almost lost faith in a system that had promised to help her, testifying before a touring party of state and local officials on a swampy Tuesday in Houston. Across the little room from her was a brand new, properly ventilated space heater. In the tiny kitchen, separated by just a sheer hanging sheet, was a new refrigerator and her pride, a stove with hinges that actually kept the oven door from falling off. 

The new solar screens meant Solomons would no longer have to block the sun on the windows with aluminum foil. The doors were sealed, cracks were caulked and insulation blown in behind the walls. Blessedly brisk air poured from a new unit. And all "on account of you all and the good Lord," Solomons told her benefactors before tears shut her down. "Y'all don't understand. Oh, my God. I can't talk about it."

This, these officials told me after thanking Solomons for her graciousness, was what the Weatherization Assistance Program was all about. This was what Sheltering Arms Senior Services of Houston has been doing for people like Solomons for 30 or more years, Lynne Cook, the chief operating officer for the social services nonprofit, said. This is what the power of $326 million in American Recovery and Reinvestment Act funds was doing for people all over Texas, Michael DeYoung, a weatherization director for the Texas Department of Housing and Community Affairs, said.

This was as if to say that Texas Watchdog's dozens of stories and blogs over the past eight months were looking at the weatherization in only one way, in a detached and negative way. And in a way, it's true. Texas Watchdog has reported extensively on Sheltering Arms' $22 million stimulus weatherization grant. The problems with the program have brought national attention. This is what we do here: hold government accountable for how it spends yours and our tax dollars.

But it isn't all we do. Back in January, Housing and Community Affairs officials who were having trouble getting weatherization moving in Texas said Sheltering Arms contractors were leading the state in the number of low income housing units made more energy efficient. Texas Watchdog asked then to visit weatherizing sites and to talk to some of the people, like Solomons, fortunate enough to get their homes remade and their utility bills reduced with as much as $6,500 in stimulus money for each home. And by seeing for ourselves, as a free press is compelled to do, we thought we could provide a public service by independently evaluating the work.

Sheltering Arms did not follow through on those requests. Instead, their attorneys asked for and got a ruling from the state attorney general that allowed Sheltering Arms to keep secret the names and addresses where weatherization work was being done. Sheltering Arms was using the law to prevent Texas Watchdog from telling the weatherization story in the other, more human way.

Thank Michael Gerber, the director of Housing and Community Affairs, for convincing the people at Sheltering Arms to change their way of thinking. Gerber has been stung by the coverage of his department having to move quadruple time to efficiently put into the pipeline a weatherization budget more than 12 times what the department had been receiving annually before the stimulus.

Gerber has also been demanding of Sheltering Arms, insisting on administrative and monitoring changes to improve the quality of the work being done by its contractors. The nonprofit has taken the criticism to heart, hiring an internal inspection chief and seeing a steep drop in its administrative expenses. 

Sheltering Arms continues to lead the way among the 44 agencies in Texas running weatherization programs, having weatherized nearly 2,000 homes through August. In its second monitoring report of contractor's work, state inspectors found 17 faulty weatherizing jobs out of 83 units inspected, by no means perfect, but a considerable improvement over a first state inspection that found that 60 percent of the jobs would require a return visit.

"Are they doing everything they should be doing? Not yet," DeYoung said. "But they have made a lot of improvement and have shown a willingness to work with our department to get better."

Sheltering Arms couldn't have had better spokespeople for its work than the people it enlisted to take part in the tour on Tuesday. 

People like Ollie James, living in one of the 189 units that received new air conditioning units and extensive energy efficiency upgrades at the Cambridge Village apartments. James, who keeps his one-bedroom apartment at 73 degrees because of a heart condition, presented utility bills showing monthly reductions of between $100 and $150 compared to the same period last year.

"I sat right here watching them replacing my windows," James said from the corner of his sofa. "They done a wonderful job."

Lost in their insistence on protecting the privacy of their clients was the opportunity to tell the story of stimulus weatherization as part of what Sheltering Arms has always done to help low-income and elderly people live better lives, Cook said. Cook said she hoped that by "over-communicating" with clients as well as the public she could better convey their message -- even though Cook would not permit Texas Watchdog to bring a videographer on the tour to document the finished work.

"Some of it has had to do with quality issues, some of it with communication," Cook said. "But I am pleased with the improvements we've made. We know because we've been out there talking to clients. We want them to know we are committed. We are so committed."

Gerber joined the group at the end of the tour, eyeballing the outer walls of Lucille Goff's home in south Houston near Martin Luther King Jr. Boulevard, where a crew was in the middle of completing about $3,500 in weatherization work. He congratulated Cook on the improvements made by the Sheltering Arms teams.

He clearly enjoyed not only seeing how the money his department controlled was put to work but that others were seeing it, too, even if a few months late. "This," he said with a smile, "is where the rubber meets the road."

Contact Mark Lisheron at 512-299-2318 or

Read more about how the federal stimulus is playing out in Texas. Search STIMULUS at

Photo of electricity meters by flickr user Fatty Tuna, used via a Creative Commons license.

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